If you’ve been waiting to purchase a new heat pump for your Florida home, then now is definitely the time. In fact, you can take advantage of heat pump tax credits between now and December 31, 2032.
Of course, new rules can be added at any time, just like how the Energy Efficiency Home Improvement Credit put a new rule in place that started at the beginning of the year. Therefore, if you want to get the highest possible rebate, it’s best to consider purchasing a new heat pump today.
Who is Eligible for the Heat Pump Tax Credit?
The tax rebate is offered to every U.S. resident who adds a natural gas or electric heat pump to their home. More specifically, the guidelines state that any taxpayer who owns a first or second home in the U.S. can install a heat pump and take advantage of the heat pump tax credit. Furthermore, renters who make eligible improvements to their rental property can also utilize this rebate.
How Much Money Can You Save?
You can receive up to a $2,000 tax credit for installing a heat pump. The one exception is for ENERGY STAR Geothermal Heat Pumps, which allows for a 30% tax credit until December 31, 2032. After which, this specific tax credit is scaled down to:
- 26% credit for purchasing a heat pump in 2033.
- 22% credit for purchasing a heat pump in 2034.
Of course, there are many factors that can make your home more energy efficient such as adding insulation to your attic. If you were to improve your home’s insulation and install a heat pump in the same year, you could receive up to $3,200.
New Requirements for the Energy Efficient Home Improvement Tax Credit
As of January 1, 2025, new IRS rules state that qualified manufacturers must provide a PIN number for each eligible product. To help facilitate this change, you can list the manufacturer’s four-digit QM code for 2025 only. After which, you’ll be required to list the PIN number to receive the tax credit.
Please note that only outdoor heat pumps, boilers, water heaters, furnaces, CAC, biomass stoves, doors, windows and skylights come with this requirement. In other words, if you’re buying an indoor heat pump, you’re not required to list a PIN number.
Florida’s Utility Programs
Aside from the federal Energy Efficient Home Improvement Tax Credit, there are also some state-level programs you might be eligible for. There are currently more than 60 different programs, per DSIRE, and they’re aimed at assisting homeowners throughout Florida.
For example, Ocala Utility Services is offering up to $250 to residents who purchase and install a heat pump. Also, Miami-Dade County has its Florida PACE Finance Programs, which also offer a deal to those who switch to a heat pump.
What Other Federal Tax Credits Can I Get?
Aside from heat pumps, the Energy Efficient Home Improvement Tax Credit also offers tax credits for several other home improvements. There are three different categories that these rebates are broken into.
Home Energy Audits
To qualify for a home energy audit credit, you must either own or rent the property as your primary residence. This credit does not apply to second homes, but it does apply to renters who make improvements.
HVAC+ Tax Credit
This credit, which includes the heat pump rebate, applies to any homeowners or renters who make property improvements. This particular category also applies to second homes. Eligible devices include:
- Propane, natural gas or oil water heaters
- Central air conditioners
- Natural gas or electric heat pumps
- Biomass boilers or biomass stoves
- Improvements to branch circuits, panelboards, sub-panelboards or feeders
- Natural gas or electric heat pump water heaters
- Propane, natural gas or oil furnaces or hot water boilers
Insulation Systems Tax Credit
Finally, adding insulation, new windows, etc. may also make you eligible for a rebate. The rules state that only homeowners who use their home as their primary residence qualify. In other words, no second homes or renters may apply. Items include:
- Insulation materials or systems
- Windows, skylights and exterior doors
- Air sealing materials or systems
Important Facts About the Tax Credits
It’s vital to be aware that these tax credits have very specific guidelines that must be followed. One of the biggest rules is that landlords are not able to collect the Energy Efficient Home Improvement Tax Credit on a home that they rent out. However, the renter of a property who schedules a home energy audit or who adds anything listed under the HVAC+ category can apply.
For instance, let’s say that you own two homes: one for your personal residence, and one you rent out. You’re eligible for the home energy audit, HVAC+ and the insulation tax credits on your personal residence, but you cannot get any of these rebates on your rental home. If, however, your renter decides to do HVAC+ upgrades or gets a home energy audit, they would be eligible for the program. In this scenario, no one would be eligible for the insulation systems tax credit on your rental home, though.
Stretch Out Your Tax Credits
The total tax rebate you can take per year via the Energy Efficient Home Improvement Tax Credit is $3,200. There is no lifetime limit, though, so you can take steps to maximize your savings. Each year, you can use up to $2,000 of the tax breaks on the HVAC+ category, which includes heat pumps. Plus, you can get an additional $1,200 annually for home insulation improvements.
Heat Pumps from One Hour Miami
Have you been in the market for a new heat pump for your Miami Area home? Call the HVAC experts at One Hour Air Conditioning & Heating today!
